CIMA BA3 · Chapter 11 · Question 1 of 12
A trader's sales for the year were $120,000 and she earns a gross profit margin of 25%. Opening inventory was $14,000 and purchases were $92,500. What was closing inventory?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $16,500
Explanation
Cost of sales = $120,000 x 75% = $90,000. Closing inventory = opening inventory + purchases - cost of sales = $14,000 + $92,500 - $90,000 = $16,500.
More Incomplete records, not-for-profit organisations and manufacturing accounts MCQs
- Q3A shop owner banks takings after paying wages and her own drawings in cash. Cash in hand was $400 at the start of the year and $600 at the…
- Q4Trade receivables were $7,300 at the start of the year and $9,100 at the end. During the year cash received from credit customers was…
- Q5What is a receipts and payments account of a club?
- Q6In the financial statements of a not-for-profit organisation such as a sports club, what is the equivalent of a business's capital account?
- Q7A club received subscriptions of $14,600 during the year. At the start of the year subscriptions in arrears were $300 and subscriptions in…